How can specific socially responsible investing principles be incorporated?

Challenge

Many investors want to ensure companies held in their stock portfolio meet certain standards. However, analyzing each company and incorporating this information into a portfolio is time consuming for an individual client, and professionally managed options can be limited. In the case of human trafficking, for example, although awareness of this grave situation continues to grow, there are very few investment products that consider human trafficking when selecting securities.

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Solution

One of our philanthropist clients refused to give up and kept pushing. They wanted to be certain that all companies in their portfolio were committed to best labor and human rights practice. Additionally, the client wanted to ensure companies were not supporting human trafficking by relying on forced or child labor anywhere in their supply chain. One of Parametric’s providers was able to leverage their deep company-level research to provide us with this information. This allowed us to construct any global stock portfolio of the client’s choosing, consisting only of companies which met their principles. Now the philanthropist, and all our clients, have access to this capability simply by checking a box at account inception.

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As a partner, at Parametric we listen to the unique needs of each of our clients to determine how to create each responsible investing portfolio, relying on hundreds of existing environmental, social and governance metrics and creating additional ones as necessary. This specific strategy, designed to ensure ownership of only companies working to ensure elimination of human trafficking in their supply chains, went into effect in the 3rd quarter of 2015. In addition to the original client, more than 100 portfolios are being managed in this manner as of June 30, 2017, with total assets of $464M.

Jennifer Sireklove, CFA - Director of Responsible Investing

Ms. Sireklove oversees all aspects of Parametric’s Responsible Investing Strategies. As the primary strategist for responsible investing, Jennifer works closely with advisors and consultants to design, develop and implement portfolio solutions that incorporate their clients’ principles.

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Investment advisory services offered through Parametric Portfolio Associates® LLC ("Parametric"), an SEC registered investment adviser. The information on this website is for U.S. residents only and does not constitute an offer to sell, or a solicitation of an offer to purchase, securities in any jurisdiction to any person to whom it is not lawful to make such an offer. Investing entails risks and there can be no assurance that Parametric (and its affiliates) will achieve profits or avoid incurring losses. All investments are subject to potential loss of principal. Parametric does not provide tax or legal advice. Prospective investors should consult with a tax or legal advisor before making any investment decision. Please refer to the disclosure page for important information about investments and risks.